Something probably not noticed by many is that year after year Walmart is slowly raising their prices, at rates higher than inflation. The problem is that in many areas Walmart has successfully beaten the little guys out of business leaving many areas reliant on Walmart. Now that they are entering the financial market they are cornering a whole new segment of business, and if successful will run local banks out of town as well.
I think that Wal-Mart's idea of offering financial services is deceitful and underhanded. All they want to do is put money in their pocket. Wal-Mart is one of the few stores I know that allow you to cash your welfare check. They lure you in with financial gimmicks that take advantage of those that already have nothing or are in a bad financial state. They are not trying to help; they are trying to keep revenue coming into their pocket.
I believe that Walmart's offering of financial services is bad for banking and consumers. There is a saying that one should never let the fox watch the hen house, and I for one believe that Walmart's jump into the financial sector is not without its own motives to secure the funds of consumers into more indebtedness to their enterprise. Walmart is well known for being the king of everything, by branching into almost every angle of consumer spending and mercilessly dominating it through low price tactics and product shutouts. I fear that an endeavor into financial products would not only lock consumers into Walmart on a revolving payday cycle, but also squeeze and dominate the consumer banking market, thereby reducing important competition in interest rates and fees. In summary, I conclude that Walmart's presence in the consumer banking market is not beneficial to the consumer or banking market.
Many have criticized Walmart for unfair business practices when competing with small local businesses. But their aggressive pricing tactics, when leveled against big financial institutions, is likely to create an atmosphere of competition that will benefit the consumer both in price and quality of the financial products that are being offered.
Some consumers are unable to obtain bank accounts. So when they get paid from their employer, they have no way of obtaining the funds. Also, some consumers like to have a Visa card, but are unable to get it from the bank. Therefore, these services help consumer fill some of their needs. I feel as long as Walmart is following the same regulations as other financial institutions, then I do not see anything wrong.
What is so wrong with having a few options? Consumers, in general, should be thrilled to have more options as to what they can do with their money. Let's be honest here, it's not uncommon, in today's world, to find people without a bank account. Why do you need one? Speaking as someone who has a Wal-Mart debit card, it offers a large amount of convenience.
Since not everyone can qualify for a traditional banking account, I think that Wal-Mart's recent financial service offerings are a necessity, even if they create more competition for banks. In other words, these services may be bad news for banks, but they are good news for the consumers that need them and cannot get them through more traditional routes.
Walmart's entry into financial services only gives consumers more choices. This might not make established financial institutions happy, but it certainly has no detrimental effect for consumers. If the financial services provided by Walmart are indeed bad, then consumers will stick to using traditional services, as they have always done before.
No, I disagree that Wal-Mart's offerings of financial services are bad for banking and consumers, because it can be more helpful than it is hurtful to consumers. Wal-Mart is a huge company that many appreciate, because of low prices and wide variety. I think people will expect the same quality with their financial offerings. If they can offer these services, it will also be more convenient for many people. Usually, store credit and financial services are easier to obtain than others, especially for people with weak or bad credit. This is good for the consumer, but can take some business away from banks. It isn't enough to harm them, though. Overall, I think consumers will benefit largely from Wal-Mart's financial services.
Walmart's recent financial services are not bad for banking and customers, because of the convenience they provide. Our society is all about quick and easy, and Walmart is one of the pioneers in this market. Customers can do virtually everything at Walmart, from getting a haircut, to picking up prescriptions. This is an opportunity for banks to partner with the store to provide even more access to their customers.
I think that, for many low-income and middle-class families, these added services offered from a company that many people rely on for low prices and trusted services are a welcome addition. I also think that, if these types of services are offered, it would be better to get them from a place like Walmart, rather than somewhere that may be more likely to be fraud or spam-related.
Walmart's offering financial services is good for consumers, especially low-income earners, because it allows them to cash checks affordably, acquire a debit card, and use banking services that they may not otherwise be able to afford. I do not believe that it is bad for banks because there will always be people who are unable to use banks. I believe that it is in fact good for banks, because it encourages them to loosen rules so that everyone will be able to afford to use a bank. Banks then would need to compete with a non-bank for the consumer. This is good for all. This is good for the economy because more people will have access to debit cards and will shop in the various ways available today. Until banks offer a valid alternative, this is good for everyone.
Retailers offering banking services or even credit services at their stores is not very new at all. They don't become very effective, however Walmart may be able to pull it off. I highly doubt it will be bad in the long run though. If anything, Walmart would increase competition in the banking field, causing a benefit to consumers, who already get screwed over by credit cards and banks.
If anything, I think Walmart's financial services are very convenient. I think this makes money options a lot easier for people, especially those without bank accounts. Walmart is just trying to give every consumer America a fair, fighting chance.